As we speak, energy prices are rising at an alarming rate. This can be attributed to many causes: the Russian invasion of Ukraine, the energy sanctions Russia implemented on European countries, and the depletion of natural resources. In turn, the surging energy prices also have quite a lot to do with worldwide inflation, and I don’t believe I need to tell you why that’s a major problem. This grim reality may have been the main driving force for the recent report by the IEA (International Energy Agency) stating that the renewable energy capacity is set to be doubled in the next 5 years. With that said, before you hurry to invest your capital in clean energy, there are some things you may want to know.
My name is Ofir Bar, and I am an investor with more than 20 years of experience in worldwide markets, and a special interest in startups and innovation. I believe that in order to be a successful investor, you need to be one step ahead of the competition, always exploring new markets and rising trends. Renewable energy is not a new idea, sure. However, jumping into the deep water of this type of investment requires a heads-up. Here are some things you need to know before diving in.
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Fast but steady
In recent years we have been witnessing a major leap in the value of clean energy stocks, and that’s no fluke. This sector is growing at a steady and fast pace, and for a few reasons.
To begin with, nowadays, environmental activists are far from being the only ones wishing to end our reliance on hazardous and depleting fossil fuels. Many companies are also advocates of this agenda, too. This creates many new opportunities for growth - a great way to attract investors. Actually, this sector is growing faster than any other sector in the world!
In these economically volatile times, when inflation is surging and uncertainty is spreading all around, renewable energy investments seem to many like an island of stability. It’s true - clean energy stocks are more stable than other types of stocks, even in times of economic downturn. That’s because they are not as dependent on economic conditions as other industries are.
The renewable energy sector can also act as a great starting point for novice investors, as there are many options to buy stocks directly from companies with just a few hundreds of dollars.
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Not a secret anymore
It sounds pretty optimistic so far, but it’s not all sunshine and rainbows. As I mentioned, the trend of investing in clean energy is not new, so it’s not a secret anymore that the energy market is headed toward it. Therefore, not only are there plenty of opportunities in this sector, but also fierce competition.
It’s important to remember that although they are more stable than other types of stocks, clean energy stocks can also experience swings. Therefore, it’s important to choose carefully what investment you wish to put your capital on, and always be attentive to the things happening in the market.
A marathon to the future
When speaking of stocks investing, and specifically on clean energy stocks, it’s most important to understand and accept the fact that you are running a marathon, not a sprint. In many cases, when investing in the future, the fruits of the investment can be harvested only after a substantial period of time. This is also the case with renewable energy investments. Patience is the name of the game here. So, don’t rush it, and don’t get frustrated if you can’t see results immediately. After all, the most fundamental trait for successful investing is long-term thinking.